Today, Minister of Finance and National Planning Hon. Dr. Situmbeko Musokotwane launched the Smart Invoice System Initiative.

Below are the highlights;

✅The Smart Invoice System is an innovative tool which will transform the country’s tax administration system, increase Zambia’s domestic revenue collection and further the nation’s economic growth.

✅The System is a significant milestone in Government’s effort to modernize tax administration and increase revenue collection.

✅The initiative was forged through a South-to-South cooperation between the Government of the Republic of Zambia and the Government of the Republic of Rwanda, signified by an existing memorandum of understanding (MOU) that was signed between the two Governments in April 2022.

✅The Minister of Finance expressed gratitude to the Zambia Revenue Authority (ZRA) and the Rwanda Revenue Authority (RRA) for making this initiative possible.

✅ Government is currently improving the tax administration so as to grow the contribution to over 90% of tax revenue from the existing almost 80%. The smart invoice system will achieve this and it will enable the government to continue providing essential public services such as healthcare, education, infrastructure development, and public safety.

✅ The introduction of the Smart Invoice System is an affirmation that the Government is committed to rely more on domestic revenue rather than borrowing.

✅Dr. Musokotwane reported that the new dawn administration has successfully implemented key provisions outlined in the national budgets, including free education and progressively increasing the constituency development fund (CDF) allocation, which is aimed at empowering 3 local communities through grassroots development initiatives.

✅Additionally, the increase in CDF from k1.6 million in 2021 to k30.8 million in 2024, signifies Government commitment to equitable development across all constituencies throughout Zambia.

✅The Smart Invoice System is a ground-breaking initiative that not only modernizes tax administration but also significantly increases revenue collection.

✅This underscores Government’s unwavering commitment to efficiency, transparency, and accountability in revenue administration.

✅The initiative, which is an electronic invoicing system, aims to digitize the invoicing process, replacing traditional paper-based invoices with electronic ones, which are transmitted to the revenue authority in real-time.

✅ By leveraging cutting-edge technology, the smart invoice system will turnaround the performance of value added tax (VAT) and other transactional tax types, while minimizing compliance costs for taxpayers.

✅Over the years, Zambia has faced challenges in the administration of VAT. According to statistics published by the organisation for economic co-operation and development (OECD, 2023), net VAT revenues contribute an average of 28 percent of total revenue in Africa, while in Zambia, VAT revenues have averaged at 23 percent during the last four years.

✅With the implementation of the smart invoice, ZRA is expected to close this gap, and excel to the heights of the peer countries such as South Africa and Rwanda where VAT revenues contribute over 30 percent of tax revenues.

✅The Smart Invoice System will facilitate real-time reporting and monitoring of transactions, enabling the revenue authority to identify discrepancies and potential instances of tax evasion promptly. It will also streamline processes for businesses, reducing administrative burdens and enhancing overall compliance.

✅ Therefore, as earlier alluded to, the Smart Invoice System signifies Government commitment to improve administrative efficiency and seal revenue leakages, especially in the area of Value-added Tax (VAT).

Credit MIM

Leave a Reply

Your email address will not be published. Required fields are marked *